Southwest faces rare labor trouble

A union representing about 8,500 ground workers at Southwest Airlines and the airline itself are asking federal mediators to break a standoff in contract talks.

The Transport Workers Union said Wednesday that there's been almost no progress made in 14 months of negotiations. Both sides say they asked the National Mediation Board to step in.

The union says Southwest is asking workers for contract concessions including outsourcing of jobs and hiring more part-timers while not offering pay raises. Charles Cerf, president of the union local that represents the workers, called Southwest's proposals “entirely unacceptable.”

Southwest has long enjoyed better labor relations than most other big airlines. It claims to have never laid off workers and generally pays higher wages while getting more productivity from employees.

Cerf said many employees are appalled by the company's “new approach” to labor, which he said uses bankruptcy cost-cutting by other airlines to justify squeezing its own workers.

Southwest has posted a profit every year going back to the early 1970s, as lower costs allowed it to charge lower fares than other airlines. But CEO Gary Kelly warned employees in December that Southwest had lost half its cost advantage because big rivals reduced expenses during bankruptcy reorganizations, making them tougher competitors. He said that Southwest could preserve current pay rates, which he called the highest in the industry, only by being more productive.

On Wednesday, Southwest didn't directly take on Cerf's comments. Spokesman Paul Flaningan said the company was committed to continue talking with the union. “Mediation is another method to assist in the collective bargaining process, and we look forward to working with a mediator to arrive at a contract that is acceptable to everyone,” he said.

Dallas-based Southwest, the nation's fourth-biggest airline, is also negotiating with pilots, mechanics and customer-service agents and will start talking to flight attendants next year.

Southwest shares rose 13 cents to $9.05 in afternoon trading.

A third straight day of falling oil prices boosted the stock of many airlines, some of which spend more than one-third of their budgets on jet fuel.